* Bids are below A$2bln reserve price for Optus satellite business
* SingTel to decide at board meeting whether to pursue Optus IPO
* Australia a strong contender for $1.8 billion listing
HONG KONG, Aug 9 (Reuters) - Singapore Telecommunications Ltd (SingTel) has received two offers for its Australian satellite business in the final round of the bidding, including one from U.S.-listed Intelsat SA, three sources with knowledge of the matter said.
Both offers came in below the A$2 billion ($1.8 billion)reserve price set for the auction and SingTel will decide at a board meeting next week whether to divest the business through an initial public offering (IPO) or ask suitors to improve their bids, the sources said.
Australia is a strong contender for a listing of the business called Optus Satellite at the same $1.8 billion valuation if SingTel decides to pursue an IPO, the sources added.
SingTel, Southeast Asia's largest telecom operator, has been seeking a sale of the satellite division of Optus since a strategic review of the asset in March. It wants to use the sale proceeds in fast-growing emerging markets.
Intelsat, the world's biggest operator of satellite services, made its offer ahead of this week's bid deadline, sources said.
The second offer came from a consortium made up of Blackstone Group LP, TPG Capital and Malaysia's MEASAT Global, the sources said.
However, the offer was subject to further due diligence as the information provided was not deemed sufficient to arrive at a firm valuation for the Australian company.
TPG and SingTel did not respond to emails seeking comment. Blackstone, Intelsat and MEASAT declined to comment.
The sources declined to be named as the process was private.
SingTel, controlled by Singapore state investor Temasek Holdings, acquired the satellite arm when it bought Optus in 2001 for $14 billion. Optus sells TV, telephony and broadband services to more than 2 million subscribers in Australia and New Zealand.
At least two bidders from a shortlist of six dropped out of the auction process in recent weeks, including France's Eutelsat Communications, the sources said.
SingTel hired Credit Suisse and Morgan Stanley to conduct a review of the satellite business and they are now running the sale.
The Singaporean company could go back to bidders with further information and ask them to resubmit their bids, the sources said. However, it could fall back on the alternative option of an IPO as the offers have not met expectations, they added.
The consortium had requested information on the length of contracts related to customers of Optus' satellites among other details to make a firm offer, according to the sources, but had not received answers.
Paris-based Eutelsat dropped out of the process after it agreed to buy Mexico's Satelites Mexicanos SA in July for an enterprise value of $1.14 billion.. Eutelsat declined to comment.
Another French firm, SES SA dropped out of the bidding earlier in July, according to sources with knowledge of the matter. SES did not respond to requests for comment.
Other shortlisted bidders, U.S. buyout firm Apollo Global Management and Japanese satellite company Sky Perfect JSAT Holdings Inc, did not make final offers, the sources said.